Do you want your business to live after you? Thinking about your death, or those of key employees, is not pleasant, but important if you run a business.

• Author: Curry, Lynne
• Position: ABM Quarterly Feature

Most business owners work hard to prepare for every worst-case scenario-except the one their families, friends and employees might consider the true "worst case"--the tragedy that unfolds when the owner dies. In Alaska, in the last decade, more than 20 relatively young business owners died suddenly due to accidents and heart attacks, leaving businesses leaderless and families doubly challenged.

The alternative?--If you own a business into which you've put part of your heart and soul and if you want your family and employees to feel cared for if an accident or medical condition suddenly incapacitates or kills you, you need to develop a succession plan. This means you think and plan now about how key managers (including yourself) could be replaced if unable to fulfill their responsibilities.

If you develop this plan now, you gain three strong advantages. First, you can develop the plan yourself. Second, you can develop the plan during a period of calm rather than a time of anguish and crisis. Third, you can put in place the elements needed for your plan's success-for example, if you decide one or more ideal successors now work for you, you can begin to groom these employees to take over portions of your job, enabling them to move into the position smoothly should disaster strike.

Owners who develop solid succession plans often receive four additional operational benefits. First, many business owners find that the future leaders that they nominate and intentionally develop to take over key leadership tasks function more effectively in their current positions. Second, the future ownership potential and the current professional development can increase your key managers to realizing core business objectives. Third, a succession plan can inspire employees into deciding to purchase an owner's business, thus providing an owner with an exit opportunity, easing the transition into retirement. Fourth, companies with a cadre of "second-generation" leaders often attract greater interest and higher prices from external purchasers.

Ready to explore a succession plan? Start by assessing the potential problems your company might face if one or more of your owners or senior managers unexpectedly faces a serious illness, accident or death.

Next, for any key position, consider purchasing "key-person" insurance, or life insurance that pays out to your company should one of those key owners or managers die. Key-person insurance provides your business the...